2023 (8) TMI 483 - AT - Insolvency and Bankruptcy

Threshold amount limit for application filed u/s 9 of IBC - relevant date for examining the threshold is the date when the application was filed or not - HELD THAT - There is no dispute between the parties regarding the relevant dates i.e. the date of issue of Demand Notice i.e. 31.01.2020 and the date on which the application was filed i.e. 04.08.2020. The application u/s 9 has been filed on 04.08.2020 which is undisputed fact. The similar issue came for consideration in 2022 (9) TMI 954 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI where Demand Notice was issued on 05.03.2020 and section 8 application was filed subsequently on 18.01.2021. Arguments was addressed that since the Operational Creditor has served the Demand Notice, the application filed on 18.01.2021 was maintainable on the threshold of Rs. One lakh. The application of the Appellant having been filed on 04.08.2020 i.e. subsequent to 24.03.2020 should fulfil the threshold of Rs. One crore and the Adjudicating Authority did not commit any error in rejecting Section 9 application. There are no merit in this appeal - appeal dismissed.

Summary

Issues involved:
The appeal against the order of the Adjudicating Authority dated 27.04.2021 dismissing the Section 9 application based on the threshold amount for triggering insolvency, as affected by a notification issued by the Ministry of Corporate Affairs.

Threshold Amount Issue:
The Appellant issued a notice on 31.01.2020 claiming Rs. 41,81,024, but a notification on 24.03.2020 raised the minimum threshold for insolvency from Rs. One lakh to Rs. One crore. The application was filed on 04.08.2021. The Adjudicating Authority rejected the application for not meeting the enhanced threshold.

Arguments and Decisions:
The Appellant argued that since the Demand Notice predated the notification, the threshold should be Rs. One lakh, citing a Supreme Court case. The Respondent contended that the threshold is based on the application filing date, not the notice date, referencing prior Tribunal judgments. The Tribunal noted the undisputed dates and a similar case, where the application date determined the threshold.

Tribunal's Analysis:
The Tribunal referred to Section 4(1) and Section 6 of the Code regarding the minimum default amount and who may initiate insolvency. It highlighted the amendment raising the threshold to Rs. One crore and emphasized the importance of the application date for determining the threshold. The Tribunal found that the application, filed after the threshold amendment, must meet the new requirement, affirming the Adjudicating Authority's decision to dismiss the Section 9 application.

Judgment and Conclusion:
The Tribunal dismissed the appeal, stating that the application post-amendment should meet the revised threshold. However, it allowed the Appellant to seek other legal remedies despite the Section 9 application dismissal. The Tribunal's decision was based on the application date aligning with the amended threshold requirement, emphasizing the critical role of the filing date in insolvency proceedings.